Exhibit 10.5
SECURITIES PURCHASE AGREEMENT
(COMMON SHARES AND WARRANTS)
SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of October 31,
2006, by and among Maritime Logistics US Holdings Inc., a Delaware corporation,
with headquarters located at 000 Xxxxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx ("XXX" or the
"COMPANY"), and the investors listed on the Schedule of Buyers attached hereto
(individually, a "BUYER" and collectively, the "BUYERS").
WHEREAS:
A. The Company and each Buyer is executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the "1933 ACT"), and Rule 506 of
Regulation D ("REGULATION D") as promulgated by the United States Securities and
Exchange Commission (the "SEC") under the 1933 Act.
B. Each Buyer wishes to purchase, and the Company wishes ShellCo (as
defined below) to sell, upon the terms and conditions stated in this Agreement,
(i) that aggregate number of shares of ShellCo's Common Stock (the "COMMON
STOCK"), set forth opposite such Buyer's name in column (3) on the Schedule of
Buyers (which aggregate amount for all Buyers together shall not exceed five
million shares of Common Stock (calculated after the Company effects a reverse
stock split (discussed below)) and shall collectively be referred to herein as
the "COMMON SHARES") for an aggregate Purchase Price not to exceed
$50,000,000.00 and (ii) warrants, in substantially the form attached hereto as
EXHIBIT A (the "WARRANTS"), to acquire that number of shares of Common Stock set
forth opposite such Buyer's name in column (4) of the Schedule of Buyers (as
exercised, collectively, the "WARRANT SHARES").
C. Contemporaneously with the Closing (as defined below), the Buyers and
ShellCo will execute and deliver a Registration Rights Agreement, substantially
in the form attached hereto as EXHIBIT B (as amended, restated, supplemented
and/or modified from time to time in accordance with the provisions thereof, the
"REGISTRATION RIGHTS AGREEMENT") pursuant to which ShellCo shall agree to
provide certain registration rights in respect of the Common Shares, and the
Warrant Shares under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.
D. The Common Shares, the Warrants and the Warrant Shares collectively are
referred to herein as the "SECURITIES".
E. In connection with the Reorganization (as defined below), ShellCo has
authorized the issuance of shares of Common Stock to certain members of its
management (the "MANAGEMENT RESTRICTED STOCK") the resale of which shall be
limited pursuant to the terms set forth in Lockup Agreements the form of which
is attached hereto as EXHIBIT C. Immediately prior to the issuance and delivery
of the Common Shares and Warrants as provided for herein, it is intended that
ShellCo shall issue the Management Restricted Stock to members of management of
the Company and their Subsidiaries.
F. Contemporaneously herewith, the Company is entering into a securities
purchase agreement, by and among the Company and the buyers listed on the
Schedule of Buyers attached thereto (the "CONVERTIBLE NOTE BUYERS"), (the
"CONVERTIBLE NOTE SECURITIES PURCHASE AGREEMENT"), wherein the Company agrees,
upon the terms and subject to the conditions of the Convertible Note Securities
Purchase Agreement, to cause ShellCo to issue and sell to the Convertible Note
Buyers (i) Senior Secured Convertible Notes of ShellCo due 2011 in an aggregate
principal amount of $65,000,000.00 (the "CONVERTIBLE NOTES"), which will be
convertible into shares of common stock (as converted, the "CONVERTIBLE NOTE
SHARES") in accordance with the terms of the Convertible Notes, and (ii) certain
warrants (the "CONVERTIBLE NOTES' WARRANTS"), which will be exercisable to
purchase additional shares of Common Stock (as exercised, the "CONVERTIBLE NOTE
WARRANT SHARES") in accordance with the terms of the Convertible Notes'
Warrants.
G. Contemporaneously with the Closing (as defined below), the Convertible
Note Buyers and ShellCo will execute and deliver a Registration Rights Agreement
(the "CONVERTIBLE NOTES REGISTRATION RIGHTS AGREEMENT"), pursuant to which
ShellCo will agree to provide certain registration rights in respect of the
Convertible Note Shares and Convertible Note Warrant Shares under the 1933 Act
and the rules and regulations promulgated thereunder, and applicable state
securities laws.
H. The Convertible Notes, Convertible Notes' Warrants and Convertible Note
Warrant Shares collectively are referred to herein as the "CONVERTIBLE NOTE
SECURITIES", and the offering thereof, the "CONVERTIBLE NOTE Offering".
I. Immediately prior to the Closing, a wholly-owned subsidiary of ShellCo
will be merged with and into the Company and the Company, as the surviving
entity, will become a wholly-owned subsidiary of ShellCo (the "REORGANIZATION").
J. Immediately prior to the Closing, ShellCo shall enter into a joinder
agreement, pursuant to which ShellCo shall, among other things, join this
Agreement, affirm the representations and warranties hereunder and agree to
perform the obligations and covenants of the Company hereunder (the "JOINDER
AGREEMENT"). The Company's obligation hereunder is subject to the condition that
ShellCo enter into the Joinder Agreement.
K. Contemporaneously with the Closing, and with certain of the proceeds of
the transactions contemplated hereby, ShellCo shall acquire, directly or
indirectly, all (or substantially all) of the equity of each of FMI Holdco I,
LLC, a Delaware limited liability company headquartered at 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 and certain of its parent companies (collectively,
"FMI"), and Clare Freight, Los Angeles, Inc. a California corporation
headquartered at 00000 Xxxxxx Xxx., Xxxx xx Xxxxxxxx, XX 00000 and TUG New York,
Inc., a New York corporation headquartered at 00 Xxxxxxxxxxx Xxx., Xxxxxxxx, XX
00000 (the "TUG COMPANIES"), (collectively, "TUG", and together with FMI, the
"TARGETS") and substantially all of the assets of the TUG Logistics group of
companies, including TUG Logistics, Inc., a California corporation headquartered
at 00000 Xxxxxx Xxx., Xxxx xx Xxxxxxxx, XX 00000, TUG Logistics (Miami), Inc. a
Florida corporation headquartered at 0000 XX 00 Xxx., Xxxxx 000, Xxxxx, XX
00000, and Glare Logistics, Inc., a California corporation headquartered at
00000 Xxxxx Xxxxxx Xxx., Xxxxxx, Xxx Xxxxxxx, XX 00000. (collectively, the
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"TUG ASSETS", and the acquisition of the TUG Assets and the Targets,
collectively, the "ACQUISITIONS").
NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.
(a) PURCHASE OF COMMON SHARES AND WARRANTS. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall use best efforts to cause ShellCo to issue and sell to each
Buyer, and each Buyer severally, but not jointly, agrees to purchase from
ShellCo on the Closing Date (as defined below), the number of Common Shares set
forth opposite such Buyer's name in column (3) on the Schedule of Buyers, along
with Warrants to acquire up to that number of Warrant Shares as is set forth
opposite such Buyer's name in column (4) on the Schedule of Buyers (the
"CLOSING").
(b) CLOSING. The date and time of the Closing (the "CLOSING DATE")
shall be 10:00 a.m., New York City time, on a date mutually agreed to by the
Company and Buyers holding the right to purchase not less than 66-2/3% of the
Shares to be sold hereunder, such Closing Date to be as soon as practicable
following satisfaction (or waiver) of the conditions to the Closing set forth in
Sections 6 and 7 below at the offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) PURCHASE PRICE. The purchase price for the Common Shares and
related Warrants to be purchased by each Buyer at the Closing shall be the
amount set forth opposite such Buyer's name in column (5) of the Schedule of
Buyers (the "PURCHASE PRICE") which shall be equal to the amount of $0.8908 per
Common Share and related Warrant, prior to the effectiveness of the reverse
stock split (the "REVERSE SPLIT") and $10.00 thereafter.
(d) FORM OF PAYMENT. On the Closing Date, (i) each Buyer shall pay
its respective Purchase Price to ShellCo, and/or one or more designees of
ShellCo for the Common Shares and Warrants to be issued and sold to such Buyer
at the Closing, by wire transfer of immediately available funds in accordance
with the Company's or ShellCo's written wire instructions, and (ii) the Company
shall use best efforts to cause ShellCo to deliver to each Buyer (A) one or more
stock certificates, with such restrictive and other legends as expressly
provided in Section 2(g) hereof, evidencing the number of Common Shares such
Buyer is purchasing as is set forth opposite such Buyer's name in column (3) of
the Schedule of Buyers and (B) a Warrant pursuant to which such Buyer shall have
the right to acquire such number of Warrant Shares as is set forth opposite such
Buyer's name in column (4) of the Schedule of Buyers, in all cases duly executed
on behalf of ShellCo and registered in the name of such Buyer.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants in respect of only itself that:
(a) NO PUBLIC SALE OR DISTRIBUTION. Such Buyer is (i) acquiring the
Common Shares and the Warrants and (ii) upon exercise of the Warrants will
acquire the Warrant Shares issuable upon exercise thereof, in the ordinary
course of business for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof,
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except pursuant to sales registered or exempted under the 1933 Act and such
Buyer does not have a present arrangement to effect any distribution of the
Securities to or through any person or entity; PROVIDED, HOWEVER, that by making
the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act and pursuant to the
applicable terms of the Transaction Documents (as defined in Section 3(b)). Such
Buyer is acquiring the Securities hereunder in the ordinary course of its
business. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person (as defined in Section 3(p)) to
distribute any of the Securities.
(b) ACCREDITED INVESTOR STATUS. Such Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D.
(c) RELIANCE ON EXEMPTIONS. Such Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon, among other things, the truth and
accuracy of, and such Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
such Buyer to acquire the Securities.
(d) INFORMATION. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and the Targets and materials relating to the offer and sale of
the Securities which have been requested by such Buyer. Such Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigations
conducted by such Buyer or its advisors, if any, or its representatives shall
modify, amend or affect such Buyer's right to rely on the Company's
representations and warranties contained herein. Such Buyer understands that its
investment in the Securities involves a high degree of risk and is able to
afford a complete loss of such investment. Such Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision in respect of its acquisition of the Securities.
(e) NO GOVERNMENTAL REVIEW. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(f) TRANSFER OR RESALE. Such Buyer understands that except as
provided in the Registration Rights Agreement: (i) the Securities have not been
and are not being registered under the 1933 Act or any state securities laws,
and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to
ShellCo an opinion of counsel, in a form reasonably acceptable to ShellCo, to
the effect that such Securities to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such registration, or (C)
such Buyer provides ShellCo with assurance reasonably
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acceptable to ShellCo that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended,
(or a successor rule thereto) (collectively, "RULE 144"); (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the Person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 0000 Xxx) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) none of
ShellCo, the Company or any other Person is under any obligation to register the
Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder. Subject to compliance with
applicable securities laws, the Securities may be pledged in connection with a
bona fide margin account or other loan or financing arrangement secured by the
Securities and such pledge of Securities shall not be deemed to be a transfer,
sale or assignment of the Securities hereunder, unless required by law, and no
Buyer effecting a pledge of Securities shall be required to provide ShellCo with
any notice thereof or otherwise make any delivery to ShellCo or the Company
pursuant to this Agreement or any other Transaction Document, including, without
limitation, this Section 2(f); provided that in order to make any sale, transfer
or assignment of Securities, such Buyer and its pledgee makes such disposition
in accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.
(g) LEGENDS. Such Buyer understands that the certificates or other
instruments representing the Common Shares, the Warrants and the Warrant Shares,
except as set forth below, shall bear any legend as required by the "blue sky"
laws of any state and a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE ISSUER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO AND IN ACCORDANCE
WITH RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
SUBJECT TO COMPLIANCE WITH APPLICABLE SECURITIES LAWS, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
The legend set forth above shall be removed and ShellCo shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by
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electronic delivery at the applicable balance account at The Depository Trust
Company ("DTC"), if, unless otherwise required by state securities laws, (i)
such Securities are registered for resale under the 1933 Act, provided that (A)
upon receipt of notice from ShellCo that the applicable registration statement
is not, or no longer is effective in respect of the resale of such Securities,
the Holder will not transfer such Securities (other than pursuant to clauses
2(g)(ii) or 2(g)(iii) below) until ShellCo notifies the Holder that the
applicable registration statement becomes effective (again), and (B) the Holder
hereby agrees to indemnify and hold ShellCo harmless against any claim of
securities laws violations in respect of any such transfer (from and after the
date the Holder receives the first notice described in Section 2(g)(i)(A) above
through the date on which the Holder receives the second notice described in
Section 2(g)(i)(A) above) by the Holder of any Security as to which such legend
has been removed, (ii) in connection with a sale, assignment or other transfer,
such holder provides ShellCo with an opinion of counsel reasonably satisfactory
to ShellCo, in a generally acceptable form, to the effect that such sale,
assignment or transfer of the Securities may be made without registration under
the applicable requirements of the 1933 Act and that such legend is no longer
required, or (iii) such holder provides ShellCo with assurances reasonably
acceptable to ShellCo that the Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A, and such holder delivers the legended
Securities to ShellCo or ShellCo's transfer agent.
(h) VALIDITY; ENFORCEMENT. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of such Buyer and shall constitute the legal, valid and binding
obligations of such Buyer enforceable against such Buyer in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.
(i) NO CONFLICTS. The execution, delivery and performance by such
Buyer of this Agreement, the Registration Rights Agreement and the other
Transaction Documents (as defined below) to which such Buyer is a party and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of any organizational documents of such Buyer
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Buyer, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Buyer to perform its obligations hereunder. Each Buyer agrees that it has
independently, based on such documents and information it deemed appropriate,
made its decision to enter into this Agreement and purchase the Common Stock
Warrants.
(j) RESIDENCY. Such Buyer is a resident of that jurisdiction
specified below its address on the Schedule of Buyers.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
(a) ORGANIZATION AND QUALIFICATION. Each of the Company and its
"SUBSIDIARIES" (which for purposes of this Agreement means any entity in which
the Company or ShellCo, directly or indirectly, owns any of the capital stock or
holds an equity or similar interest, including, without limitation, each of the
Targets) are entities duly organized and validly existing in good standing under
the laws of the jurisdiction in which they are formed, and have the requisite
power and authority to own their properties and to carry on their business as
now being conducted. Each of the Company, the Targets and their Subsidiaries is
duly qualified as a foreign entity to do business and, to the extent applicable,
is in good standing in every jurisdiction in which its ownership of property or
the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. As used in this Agreement, "MATERIAL
ADVERSE EFFECT" means any material adverse effect on the business, properties,
assets, operations, results of operations or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby and the other Transaction Documents or by the agreements and
instruments to be entered into in connection herewith or therewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents. The Company and each Target has only those Subsidiaries
set forth on SCHEDULE 3(A).
(b) AUTHORIZATION; ENFORCEMENT; VALIDITY. The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and each of the other agreements entered into
by the parties hereto in connection with the transactions contemplated by this
Agreement to which the Company is a party (such documents, together with the
Warrants, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 5), and each of the other agreements to be
entered into by the parties hereto in connection with the purchase of the Common
Stock and Warrants contemplated by this Agreement, collectively, the
"TRANSACTION DOCUMENTS") in accordance with the terms hereof and thereof. The
execution and delivery of the Transaction Documents to which the Company is a
party and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly authorized by the Company's Board of Directors
and no further filing, consent or authorization is required by the Company, its
Board of Directors or its stockholders except as may be required under
applicable securities laws. This Agreement and the other Transaction Documents
to which the Company is a party have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(c) OFFER OF SECURITIES. Subject to the accuracy of Buyer's
representation and warranties hereunder, the offer by the Company of the
Securities is exempt from registration under the 1933 Act.
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(d) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents to which the Company is a party and the consummation by
the Company of the transactions contemplated hereby and thereby will not (i)
result in a violation of any certificate of incorporation, certificate of
formation, any certificate of designations or other constituent documents of the
Company, any Target or any of their Subsidiaries, any capital stock of the
Company any Target or any of their Subsidiaries, or the bylaws of the Company,
any Target or any of their Subsidiaries or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company any Target or any of their Subsidiaries is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to the
Company any Target or any of their Subsidiaries or by which any property or
asset of the Company any Target or any of their Subsidiaries is bound or
affected except in the case of clauses (ii) and (iii) of this Section 3(d), for
such conflicts, defaults, rights or violations which would not, individually or
in the aggregate, have a Material Adverse Effect.
(e) CONSENTS. None of the Company, any Target or any of their
Subsidiaries is required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents to which it is a party, in each case in accordance with
the terms hereof or thereof, other than the current report on Form 8-K required
to be filed after Closing by ShellCo pursuant to Section 4(h) of this Agreement,
the filing of the Schedule 14C relating to the Reverse Split among others
things, the Form D filing required to be made following the Closing by ShellCo
with the SEC, and filings required by applicable state securities laws, and the
registration statement and related state securities law filings required by the
Registration Rights Agreement. All consents, authorizations, orders, filings and
registrations which the Company is required to have obtained prior to the date
hereof pursuant to the preceding sentence have been obtained or effected.
[Notwithstanding the first two sentences of this Section 3(e), to the extent
that any Foreign Subsidiary is required to obtain any consent, authorization or
order, or make any filing or registration, but has not done so, such failure
shall not constitute a default hereunder or under the other Transaction
Documents if such failure(s), individually or in the aggregate, would not have a
Material Adverse Effect.]
(f) ACKNOWLEDGMENT REGARDING BUYER'S PURCHASE OF SECURITIES. The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm's length purchaser in respect of the Transaction Documents and the
transactions contemplated hereby and thereby and that, except as set forth on
SCHEDULE 3(F) hereof, no Buyer is (i) an officer or director of the Company,
(ii) an "affiliate" of the Company (as defined in Rule 144) or (iii) to the
knowledge of the Company, a "beneficial owner" of more than 10% of the shares of
Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "1934 ACT")). The Company further acknowledges
that, except as set forth on SCHEDULE 3(F) hereof, no Buyer is acting as a
financial advisor or fiduciary of any of ShellCo, the Company, any Target or any
Subsidiary (or in any similar capacity) in respect of the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a
Buyer or any of its representatives or agents in connection with the Transaction
Documents and
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the transactions contemplated hereby and thereby is merely incidental to such
Buyer's purchase of the Securities. The Company further represents to each Buyer
that the decision of the Company and each of its Subsidiaries to enter into the
Transaction Documents to which it is a party has been based solely on the
independent evaluation by the Company, such Subsidiaries and their
representatives.
(g) NO GENERAL SOLICITATION; PLACEMENT AGENT'S FEES. None of the
Company, any of its affiliates, or to the knowledge of the Company, any Person
acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of the Securities. The Company shall be responsible for the
payment of any placement agent's fees, financial advisory fees, or brokers'
commissions (other than for persons engaged by any Buyer or its investment
advisors) relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, attorney's fees and out-of-pocket
expenses) arising in connection with any such claim. The Company acknowledges
that it has engaged Xxxxxx & Xxxxxxx, LLC as placement agent (the "AGENT") in
connection with the sale of the Securities. Other than the Agent, the Company
has not engaged any placement agent or other agent in connection with the sale
of the Securities.
(h) NO INTEGRATED OFFERING. None of the Company, its Subsidiaries,
any of their affiliates, nor to the knowledge of the Company, any Person acting
on their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of any of the Securities under the 1933 Act or cause
this offering of the Securities to be integrated with prior or concurrent
offerings by the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated other than the
Convertible Note Offering and the Acquisitions, which Convertible Note Offering
and Acquisitions have been undertaken only in such a manner as to not adversely
affect the exemption from registration enjoyed by the sale of the Securities
pursuant to this Agreement. None of the Company nor its Subsidiaries, will take
any action or steps referred to in the preceding sentence that would require
registration of any of the Securities under the 1933 Act or cause the offering
of the Securities to be integrated with other offerings.
(i) APPLICATION OF TAKEOVER PROTECTIONS; RIGHTS AGREEMENT. The
Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
(as defined in Section 3(o)) or the laws of the jurisdiction of its organization
which is or could become applicable to any Buyer as a result of the transactions
contemplated by this Agreement, including, without limitation, ShellCo's
issuance of the Securities and any Buyer's ownership of the Securities. The
Company has not adopted a stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of its Common Stock or a
change in control of the Company.
(j) FINANCIAL STATEMENTS. The financial statements of the Company
and each of the Targets have been prepared in accordance with United States
generally accepted accounting
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principles consistently applied ("GAAP"), during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company, or such
Target, as applicable, as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except for liabilities and
obligations incurred in the ordinary course of business and consistent with past
practice, liabilities and obligations reflected on or reserved against in the
June 30, 2006 interim balance sheets of each of the Company and each Target
prepared in accordance with GAAP delivered pursuant to Section 7(l) (the
"BALANCE SHEETS") and as otherwise contemplated herby or disclosed herein or in
the disclosure schedules to this Agreement (the "DISCLOSURE SCHEDULES"), since
July 1, 2006, inclusive of such date, none of the Company or any Target has
incurred any liabilities or obligations that would be required to be reflected
or reserved against in a balance sheet of the Company or such Target, as
applicable, prepared in accordance with the principles used in the preparation
of the Balance Sheets. No other written information in that certain private
placement memorandum dated October 23, 2006 (the "PPM") provided by or on behalf
of the Company, the Targets or any of their respective Subsidiaries to the
Buyers, including, without limitation, information referred to in Section 2(d)
of this Agreement, contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstance under which they are or were made, not misleading.
(k) ABSENCE OF CERTAIN CHANGES. Since June 30, 2006, there has been
no change or development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company, any
Target or any of their respective Subsidiaries that has had or could reasonably
be expected to have a Material Adverse Effect. Since June 30, 2006, (and before
giving effect to the transactions contemplated under the Transaction Documents),
none of the Company or any Target has (i) declared or paid any dividends, (ii)
sold any assets, individually or in the aggregate, in excess of $300,000 outside
of the ordinary course of business, (iii) had capital expenditures, individually
or in the aggregate, in excess of $300,000 or (iv) waived any material rights in
respect of any Indebtedness or other rights in excess of $300,000 owed to it.
None of the Company or any Target has taken any steps to seek protection
pursuant to any bankruptcy law, nor does the Company have any knowledge or
reason to believe that its creditors or the creditors of any Target intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any fact
which would reasonably lead a creditor to do so. The Company is not as of the
date hereof, and after giving effect to the transactions contemplated hereby to
occur at the Closing will not be, Insolvent (as defined below). For purposes of
this Section 3(k), "Insolvent" means (i) the present fair saleable value of the
Company's assets (and including as assets for this purpose at a fair valuation
all rights of subrogation, contribution or indemnification arising pursuant to
any guarantees given by such Person) is less than the amount required to pay the
Company's (after giving effect to the Acquisitions) total Indebtedness (as
defined in Section 3(p)), (ii) the Company is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, (iii) the Company intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) the Company has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.
10
(l) CONDUCT OF BUSINESS; REGULATORY PERMITS. None of the Company,
any Target or any of their respective Subsidiaries is in violation of any term
of or in default under its certificate of incorporation, certificate of
formation, any certificate of designations of any outstanding series of
preferred stock of such company or Bylaws or their organizational charter or
other constituent documents or bylaws, respectively. None of the Company any
Target or any of their respective Subsidiaries is in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to such
entity, and none of the Company, any Target or any of their respective
Subsidiaries will conduct its respective business in violation of any of the
foregoing, except for such violations and/or possible violations which would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each of the Company, each Target and each of their Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, and none
of the Company, any Target or any of their Subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit except where such proceedings, revocation
or modification would not have a Material Adverse Effect.
(m) FOREIGN CORRUPT PRACTICES. None of the Company, any Target or
any of their Subsidiaries, nor any director, officer, agent, employee or other
Person acting on behalf of any of them has, in the course of its actions for, or
on behalf of, such entity (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
(n) TRANSACTIONS WITH AFFILIATES. Except as set forth in SCHEDULE
3(N) hereto, other than the issuance of restricted stock and the other
arrangements disclosed on SCHEDULE 3(N), none of the officers, directors or
employees of any of the Company, any Target or any of their Subsidiaries is
presently a party to any transaction with any of the Company, any Target or any
of their Subsidiaries (other than for ordinary course services as employees,
officers or directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.
(o) EQUITY CAPITALIZATION. As of the date hereof, and prior to
giving effect to the Merger, the authorized capital stock of the Company
consists of one million shares of Common Stock. All of the outstanding shares of
Common Stock of the Company have been validly issued and are fully paid and
nonassessable. Except as disclosed in SCHEDULE 3(O): (i) none of the Company's
capital stock is subject to preemptive rights or any other similar rights or any
liens or encumbrances suffered or permitted by the Company; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of
11
the Company or any of its Subsidiaries; (iii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound except for such Indebtedness which (x) will be paid or satisfied in full
promptly after Closing with the proceeds of the purchase of securities
hereunder, of the Convertible Note Offering, and under that certain loan
agreement, by and among ShellCo, the Company and the lenders listed on the
schedule of lenders thereto and Fortress Credit Corp. as administrative agent
thereunder or (y) constitutes Permitted Indebtedness (as defined in the
Convertible Notes); (iv) there are no financing statements securing obligations
in any material amounts, either singly or in the aggregate, filed in connection
with the Company or any of its Subsidiaries; (v) there are no agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except pursuant
to the Registration Rights Agreement and the Convertible Notes Registration
Rights Agreement); (vi) there are no outstanding securities or instruments of
the Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of such Subsidiaries; (vii)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii) the
Company does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; (ix) all the Company's outstanding
options and warrants shall be cancelled at Closing; and (x) no securities of the
Company, any Target or the Subsidiaries are listed or quoted on any stock
exchange or automated quotation system. All of the Company's outstanding options
and warrants shall be canceled at Closing. Immediately after giving effect to
the Reorganization, (i) all of the Company's issued and outstanding stock shall
be owned by ShellCo and (ii) all other securities issued by the Company
(including, without limitation, any securities disclosed in SCHEDULE 3(O)) shall
have been exchanged for shares of ShellCo's Common Stock. The Company has made
available to the Buyers true, correct and complete copies of the Company's
Certificate of Incorporation, as amended and as in effect on the date hereof
(the "CERTIFICATE OF INCORPORATION"), and the Company's Bylaws, as amended and
as in effect on the date hereof (the "BYLAWS"), and all agreements relating to
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock and the material rights of the holders thereof in respect thereto.
(p) INDEBTEDNESS AND OTHER CONTRACTS. Except as disclosed in
SCHEDULE 3(P), none of the Company, any Target or any of their Subsidiaries (i)
has any outstanding Indebtedness (as defined below) except for such Indebtedness
which will be paid or satisfied in full promptly after Closing with the proceeds
of the purchase of securities hereunder, of the Convertible Note Offering, and
under that certain loan agreement, by and among ShellCo, the Company and the
lenders listed on the schedule of lenders thereto and Fortress Credit Corp. as
administrative agent thereunder, (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be
expected to result in a Material Adverse Effect, (iii) is in violation of any
term of
12
or in default under any contract, agreement or instrument relating to any
Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company's officers, has or is
expected to have a Material Adverse Effect. On the Closing Date, immediately
after giving effect to the Merger, none of ShellCo, the Company, any Target, or
Subsidiary shall have any outstanding Indebtedness, other than the Notes, the
Permitted Senior Indebtedness (as defined in the Convertible Notes) and the
Permitted Indebtedness (as defined in the Convertible Notes) set forth on
SCHEDULE 3(P). For purposes of this Agreement: (x) "INDEBTEDNESS" of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including (without limitation) "capital leases" in
accordance with generally accepted accounting principles (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations in respect of letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case in respect of any
property or assets acquired with the proceeds of such indebtedness (even though
the rights and remedies of the seller or bank under such agreement in the event
of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) "CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability, contingent or otherwise, of that Person in respect of any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss in respect thereof; and (z)
"PERSON" means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization or a
government or any department or agency thereof.
(q) ABSENCE OF LITIGATION. There is no action, suit, proceeding,
inquiry or investigation that, individually or in the aggregate, would have a
Material Adverse Effect before or by, any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting any of the Company, the Targets, their
respective Subsidiaries, any of their respective officers or directors, or the
Common Stock.
13
(r) INSURANCE. The Company, each Target and each of their respective
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which such entities
are engaged. None of the Company, any Target or any such Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
(s) EMPLOYEE RELATIONS. (i) None of the Company, any Target or any
of their respective Subsidiaries is a party to any collective bargaining
agreement or employs any member of a union. No executive officer (as defined in
Rule 5b-7 promulgated under the 0000 Xxx) of the Company, any Target or any of
their respective Subsidiaries (as defined in Rule 501(f) promulgated under the
0000 Xxx) has notified the Company, such Target or any such Subsidiary that such
officer intends to leave the Company, such Target or Subsidiary, as applicable
or otherwise terminate such officer's employment with the Company, such Target
or Subsidiary. To the knowledge of the Company, no executive officer of the
Company, any Target or any of their respective Subsidiaries is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, except where such violation would not have a Material Adverse Effect
and the continued employment of each such executive officer does not subject the
Company, such Target or any of the Subsidiaries to any liability in respect of
any of the foregoing matters except such liability that would not have a
Material Adverse Effect.
(ii) The Company, each Target and their respective
Subsidiaries are in compliance with all federal, state, local and foreign laws
and regulations respecting labor, employment and employment practices and
benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance therewith would not, either individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(t) TITLE. The Company, each Target and their respective
Subsidiaries (other than Foreign Subsidiaries) have good and valid title in fee
simple to all real property and valid title to all personal property owned by
them which is material to the business of the Company, such Target or
Subsidiary, as applicable, in each case free and clear of all liens,
encumbrances and defects except for Permitted Liens (as defined in the
Convertible Notes) and those liens, encumbrances and defects described in
SCHEDULE 3(T) or such as do not materially affect the value of such property and
do not materially interfere with the use made and proposed to be made of such
property by the Company, such Target or any of such Subsidiaries. To the
knowledge of the Company, (i) none of the Foreign Subsidiaries owns fee simple
interest in any real property (or the equivalent thereof under applicable law)
and (ii) each of the Foreign Subsidiaries has good and valid title to all
personal property owned by them which is material to the business of such
Subsidiary. Except as set forth on SCHEDULE 3(T), any real property and
facilities held under lease by the Company, any Target or any of their
respective Subsidiaries are held by the applicable entity under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company, the Targets and such Subsidiaries. Where failures to
have such valid,
14
subsisting and enforceable lease(s) exist, such failures, in the aggregate,
would not have a Material Adverse Effect.
(u) INTELLECTUAL PROPERTY RIGHTS. The Company, each Target and their
respective Subsidiaries (other than Foreign Subsidiaries) own or possess, and to
the knowledge of the Company, the Foreign Subsidiaries own or possess, adequate
rights or licenses to use all trademarks, trade names service marks and all
applications and registrations therefor, patents, patent rights, copyrights,
original works of authorship, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights
("INTELLECTUAL PROPERTY RIGHTS") necessary to conduct their respective
businesses as now conducted. Except as set forth on SCHEDULE 3(U), none of the
Company's, Targets' or their respective Subsidiaries' registered, or applied
for, Intellectual Property Rights have expired or terminated or have been
abandoned, or are expected to expire or terminate or expected to be abandoned,
within three years from the date of this Agreement, except as to such
Intellectual Property Rights the loss of which would not have a Material Adverse
Effect. The Company does not have any knowledge of any infringement by the
Company, any Target or their respective Subsidiaries of Intellectual Property
Rights of others except of such infringement that would not have a Material
Adverse Effect. Except as set forth on SCHEDULE 3(U), there is no claim, action
or proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company, any Target or such Subsidiaries regarding their
respective Intellectual Property Rights. Any such claims, actions and
proceedings being made, brought or threatened would not in the aggregate, have a
Material Adverse Effect. The Company is unaware of any facts or circumstances
which might give rise to any of the foregoing infringements or claims, actions
or proceedings which would, individually or in the aggregate, have a Material
Adverse Effect. The Company, each Target and their respective Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their Intellectual Property Rights.
(v) ENVIRONMENTAL LAWS. The Company, each Target and their
respective Subsidiaries (i) are in compliance with any and all Environmental
Laws (as hereinafter defined), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval except where, in the foregoing clauses
(i), (ii) and (iii), the failure to so comply with such Environmental Laws,
permits, licenses or other approvals or to obtain such permits, licenses or
approvals would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect. The term "ENVIRONMENTAL LAWS" means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
15
(w) SUBSIDIARY RIGHTS. The Company or one of its Subsidiaries has
the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital
securities of its Subsidiaries owned by the Company or such Subsidiary,
respectively, subject to the Transaction Documents. Each Target or one of their
respective Subsidiaries has the unrestricted right to vote, and (subject to
limitations imposed by applicable law) to receive dividends and distributions
on, all capital securities of its Subsidiaries as owned by such Target or such
Subsidiary, subject to the Transaction Documents.
(x) TAX STATUS. Except as set forth on SCHEDULE 3(X), the Company,
each Target and each of their respective Subsidiaries (i) has made or filed all
foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
Except as set forth on SCHEDULE 3(X), there are no material unpaid taxes claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. Each of the claims set forth on
SCHEDULE 3(X) is being contested in good faith or would not be expected,
individually or in the aggregate, to have a Material Adverse Effect. Except as
set forth on SCHEDULE 3(X), no liens have been filed securing taxes and other
governmental assessments and charges and no claims are being asserted by or
against the Company, any Target or any of their respective Subsidiaries in
respect of any taxes (other than liens for taxes not yet due and payable) or
other governmental assessments or charges. Except as set forth on SCHEDULE 3(X),
none of the Company, any Target or any of their respective Subsidiaries has
received notice of assessment or proposed assessment of any taxes claimed to be
owed by it or any other Person on its behalf. Except as disclosed on SCHEDULE
3(X), none of the Company, any Target or any of their respective Subsidiaries is
a party to any tax sharing or tax indemnity agreement or any other agreement of
a similar nature that remains in effect. None of the items set forth on SCHEDULE
3(X) would, individually or in the aggregate, have a Material Adverse Effect.
Each of the Company, each Target and their respective Subsidiaries has complied
in all material respects with all applicable legal requirements relating to the
payment and withholding of taxes and, within the time and in the manner
prescribed by law, has withheld from wages, fees and other payments and paid
over to the proper governmental or regulatory authorities all amounts required.
(y) INTERNAL ACCOUNTING CONTROLS. The Company, each Target and each
of their respective Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken in respect of any
difference.
(z) DISCLOSURE. Each of this Agreement (including the Schedules
hereto), the other Transaction Documents and that certain Private Placement
Memorandum dated October
16
23, 2006 (including the various attachments thereto) furnished by or on behalf
of the Company regarding the Company, the Targets, their respective businesses
and the transactions contemplated hereby is true and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which it was made, not misleading. Each
press release issued by the Company or its Subsidiaries (other than the Foreign
Subsidiaries) during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. To the knowledge of the Company, no press
release issued by any Foreign Subsidiary during the twelve (12) months preceding
the date of this Agreement at the time of release contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists in respect of the Company or any
of its Subsidiaries (other than the Foreign Subsidiaries) or its or their
business, properties, operations or financial condition, which, under applicable
law, rule or regulation, requires public disclosure or announcement by the
Company but which has not been so publicly announced or disclosed. To the
knowledge of the Company, no event or circumstance has occurred or information
exists in respect of any of the Foreign Subsidiaries or its business,
properties, operations or financial condition, which, under applicable law, rule
or regulation, requires public disclosure or announcement by such Person or its
parent company but which has not been so publicly announced or disclosed.
(aa) OTC BULLETIN BOARD. The Common Stock is designated for
quotation on the National Association of Securities Dealers Inc.'s OTC Bulletin
Board (the "INITIAL PRINCIPAL MARKET"). At all times since such designation,
ShellCo has complied with the rules of the Initial Principal Market.
(bb) U.S. REAL PROPERTY HOLDING CORPORATION. The Company is not, nor
has it ever been, a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon any Buyer's request.
4. COVENANTS.
(a) BEST EFFORTS. Each party shall use its best efforts timely to
satisfy each of the covenants and the conditions to be satisfied by it as
provided in Sections 5, 6 and 7 of this Agreement.
(b) FORM D AND BLUE SKY. The Company agrees to use its best efforts
to cause ShellCo to file a Form D in respect of the Securities as required under
Regulation D and to provide a copy thereof to each Buyer promptly upon request
after such filing. The Company, on or before the Closing Date, shall or shall
use its best efforts to cause ShellCo to take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Securities for sale to the Buyers at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the states of the
United States (or to obtain an
17
exemption from such qualification), and shall upon request provide evidence of
any such action so taken to the Buyers on or prior to the Closing Date.
(c) REPORTING STATUS. Until the date on which the Investors (as
defined in the Registration Rights Agreement) shall have sold all the Common
Shares and Warrant Shares and none of the Warrants is outstanding (the
"REPORTING PERIOD"), the Company shall use best efforts to cause ShellCo to
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, provided that prior to the filing of the Registration Statement with the
SEC as required by the Registration Rights Agreement, compliance with the
current public information requirements of Rule 144(e) thereunder shall be
sufficient, and the Company shall use best efforts to prohibit ShellCo from
terminating its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would otherwise
permit such termination.
(d) USE OF PROCEEDS. The Company will use the proceeds from the sale
of the Securities for general corporate purposes, including general and
administrative expenses and not for the redemption or repurchase of any of its
or its Subsidiaries' equity securities.
(e) FINANCIAL INFORMATION. The Company agrees to use best efforts to
cause ShellCo to send the following to each Investor during the Reporting Period
(i) unless the following are filed with the SEC through XXXXX and are available
to the public through the XXXXX system, within three (3) Business Days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K or
10-KSB, its Quarterly Reports on Form 10-Q or 10-QSB or any other interim
reports or any consolidated balance sheets, income statements, stockholders'
equity statements and/or cash flow statements filed with the SEC for any period
other than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933
Act, (ii) two (2) Business Days after release thereof (unless such press release
is available on PR Newswire or Business Wire) facsimile or e-mailed copies of
all press releases issued by ShellCo, the Company or any of their respective
Subsidiaries, and (iii) copies of any notices and other information made
available or given to the stockholders of ShellCo or the Company, generally,
contemporaneously with the making available or giving thereof to the
stockholders. As used herein, "BUSINESS DAY" means any day other than Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.
(f) FEES. The Company and ShellCo, as applicable, shall be
responsible for the payment of any placement agent's fees, financial advisory
fees, or broker's commissions (other than for Persons engaged by any Buyer)
relating to or arising out of the transactions contemplated hereby, including,
without limitation, any fees or commissions payable to the Agent. The Company
shall pay or use best efforts to cause ShellCo to pay, and hold or use best
efforts to cause ShellCo to hold, each Buyer harmless against, any liability,
loss or expense (including, without limitation, reasonable attorney's fees and
out-of-pocket expenses) arising in connection with any claim relating to any
such payment. Except as otherwise set forth in the Transaction Documents, each
party to this Agreement shall bear its own expenses in connection with the sale
of the Securities to the Buyers.
18
(g) PLEDGE OF SECURITIES. The Company, on behalf of itself and
ShellCo, acknowledges and agrees subject to compliance with applicable
securities laws, that the Securities may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is
secured by the Securities. Except as otherwise required by applicable securities
laws, the pledge of Securities shall not be deemed to be a transfer, sale or
assignment of the Securities hereunder, and no Investor effecting a pledge of
Securities shall be required to provide the Company or ShellCo with any notice
thereof or otherwise make any delivery to the Company or ShellCo pursuant to
this Agreement or any other Transaction Document, including, without limitation,
Section 2(f); provided that an Investor and its pledgee shall be required to
comply with the provisions of Section 2(f) in order to effect a sale, transfer
or assignment of Securities to such pledgee. The Company hereby agrees to
execute and deliver, and to use best efforts to cause ShellCo to execute and
deliver, such documentation as a pledgee of the Securities may reasonably
request in connection with a pledge of the Securities to such pledgee by an
Investor.
(h) DISCLOSURE OF TRANSACTIONS AND OTHER MATERIAL INFORMATION. On or
before 8:30 a.m., New York City time, on the first Business Day following the
Closing Date, the Company shall cause ShellCo to file a press release (the
"PRESS RELEASE") describing the material terms of the transactions contemplated
by the Transaction Documents. The Company shall use best efforts to cause
ShellCo to file, as a "small business issuer" (as defined in Item 10(a) of
Regulation SB under the 1934 Act), a Current Report on Form 8-K describing the
terms of the transactions contemplated by the Transaction Documents in the form
and by the date required by the 1934 Act and attaching the material Transaction
Documents (including, without limitation, this Agreement (and all Schedules to
this Agreement), the form of the Warrants and the Registration Rights Agreement)
as exhibits to such filing if and to the extent required by the 1934 Act
(including all attachments, the "8-K FILING"). From and after the filing of the
8-K Filing with the SEC, no Buyer shall be in possession of any material,
nonpublic information received from ShellCo, the Company, any of their
respective Subsidiaries or any of its respective officers, directors, employees
or agents, that is not disclosed in the 8-K Filing. The Company shall not, and
shall use best efforts to cause ShellCo and each of their Subsidiaries and each
of their respective officers, directors, employees and agents, not to, provide
any Buyer with any material, nonpublic information regarding ShellCo, the
Company or any of their Subsidiaries from and after the filing of the 8-K Filing
with the SEC without the express written consent of such Buyer.
(i) VARIABLE SECURITIES; DILUTIVE ISSUANCES. For so long as any
Warrants remain outstanding, the Company shall use best efforts to cause ShellCo
not to, in any manner, issue or sell any rights, warrants or options to
subscribe for or purchase Common Stock or directly or indirectly convertible
into or exchangeable or exercisable for Common Stock at a price which varies or
may vary with the market price of the Common Stock, including by way of one or
more reset(s) to any fixed price unless the conversion, exchange or exercise
price of any such security cannot be less than the Closing Sale Price (as
defined in the Warrants) of the Common Stock on the Trading Day immediately
prior to the execution of this Agreement (as adjusted for stock splits, stock
dividends, reverse stock splits, recapitalizations, reclassifications and
similar events). Notwithstanding the foregoing sentence, ShellCo is permitted
hereby to issue the Warrants provided for hereby and the Notes and Warrants
under the Convertible Note Offering, which provide in certain circumstances for
adjustments to their exercise and conversion prices,
19
as applicable. For so long as any Warrants remain outstanding, the Company shall
use best efforts to cause ShellCo not to, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Warrants) if the effect of such
Dilutive Issuance is to cause ShellCo to be required to issue upon exercise of
any Warrant any shares of Common Stock in excess of that number of shares of
Common Stock which ShellCo may issue upon exercise of the Warrants without
breaching ShellCo's obligations under the rules or regulations of the Principal
Market or the stock exchange or automated quotation system upon which ShellCo's
shares of Common Stock are traded, including, without limitation, any and all
discounted issuance rules, if applicable. As used herein, "STOCKHOLDER APPROVAL"
shall mean the affirmative vote by stockholders holding no less than a majority
of the voting power of the Common Stock approving resolutions providing for the
Company's issuance of all of the Securities as described in the Transaction
Documents in accordance with applicable law and the rules and regulations of the
Principal Market. "PRINCIPAL MARKET" shall mean the Initial Principal Market or
other Eligible Market on which the Common Stock is designated for quotation or
listed and principally trades.
(j) CORPORATE EXISTENCE. For so long as any Buyer beneficially owns
any Warrants, the Company shall use best efforts to cause ShellCo to maintain
its corporate existence and shall not sell all or substantially all of the
Company's assets, except in the event of a merger or consolidation or sale of
all or substantially all of the Company's assets, where the surviving or
successor entity in such transaction assumes the Company's obligations hereunder
and under the agreements and instruments entered into in connection herewith.
(k) RESERVATION OF SHARES. For so long as any Buyer owns any
Warrants, and contingent on the Reverse Split, the Company shall use best
efforts to cause ShellCo to take all actions necessary to at all times after the
Closing Date have authorized, and reserved for the purpose of issuance, no less
than 130% of the sum of (i) the number of shares of Common Stock issuable upon
conversion of all of the Convertible Notes, (ii) the number of shares of Common
Stock issuable upon exercise of the Convertible Notes' Warrants issued, and
(iii) the number of shares of Common Stock issuable upon exercise of the
Convertible Notes' Warrants (without taking into account any limitations on the
conversion of the Convertible Notes or exercise of the Warrants or Convertible
Notes' Warrants set forth in the Convertible Notes, Warrants and Convertible
Notes' Warrants, respectively).
(l) CONDUCT OF BUSINESS. The business of ShellCo, the Company and
their Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.
(m) NO ADDITIONAL REGISTERED SECURITIES. From the Closing Date until
the date that is 90 Trading Days following the Effective Date (as defined in the
Registration Rights Agreement), neither ShellCo nor the Company will file a
registration statement under the 1933 Act, or allow any such registration
statement to become effective, in respect of any securities other than the
Registration Statement contemplated by the Registration Rights Agreement and the
registration rights agreement in respect of the Common PIPE Offering and/or a
registration statement on Form S-8.
20
(n) OTC BULLETIN BOARD. The Company shall cause ShellCo to use best
efforts to comply with the rules of the Principal Market.
(o) GENERAL SOLICITATION. None of the Company, any of its affiliates
(as defined in Rule 501(b) under the 0000 Xxx) or any person acting within the
scope of their delegated authority on behalf of the Company or such affiliate
will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of
Regulation D, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(p) CONSENTS. Each Buyer hereby acknowledges, that it is the
intention of the Company to use its best efforts to cause ShellCo to cause there
to occur as reasonably promptly as practicable after the Merger becomes
effective (i) a Reverse Split in respect of the Common Shares pursuant to which
11.226 shares of Common Stock prior to the Reverse Split would be converted into
and become one share of Common Stock immediately after the Reverse Split and
(ii) to change the name of ShellCo to "Summit Global Logistics, Inc." In
connection therewith, the numbers of shares of Common Stock for which the Notes
are convertible and the Warrants and Convertible Notes' Warrants are exercisable
shall be adjusted as shall the "Conversion Price" or "Exercise Price" therefor,
as applicable (as more specifically provided in the Notes, Warrants or
Convertible Notes' Warrants, as applicable) in the same ratio as the Reverse
Split. Likewise, the number of shares of Common Stock originally subscribed for
hereunder and issued pursuant hereto shall be adjusted pursuant to the Reverse
Split. If the consent of the Buyers, or any of them shall be required in order
to effect the Reverse Split and/or to change the name of the Company as set
forth above, the Buyer agrees to take such actions as the Company or ShellCo may
deem reasonably necessary to effect such stockholder actions.
5. REGISTER; TRANSFER AGENT INSTRUCTIONS.
(a) REGISTER. The Company shall use best efforts to cause ShellCo to
maintain at its principal executive offices (or such other office or agency of
ShellCo as it may designate), a register for the Common Shares and the Warrants,
in which ShellCo shall record the name and address of the Person in whose name
the Common Shares and the Warrants have been issued (including the name and
address of each transferee), the face amount of Common Shares held by such
Person, the number of Warrant Shares issuable upon exercise of the Warrants held
by such Person and the number of Common Shares held by such Person. The Company
shall use best efforts to cause ShellCo to keep the register open and available
at all times during business hours for inspection of any Buyer or its legal
representatives.
(b) TRANSFER AGENT INSTRUCTIONS. The Company shall use best efforts
to cause ShellCo to issue instructions to its transfer agent, and any subsequent
transfer agent, which instructions shall be consistent with Section 2(g) and
shall instruct such transfer agent and any subsequent transfer agent to issue
certificates or credit shares to the applicable balance accounts at DTC in the
name of each Buyer or its respective nominee(s), for the Common Shares, and the
Warrant Shares issued at the Closing or upon exercise of the Warrants in such
amounts as specified from time to time by each Buyer to ShellCo upon exercise of
the Warrants in the form
21
of EXHIBIT D attached hereto (the "TRANSFER AGENT INSTRUCTIONS"). The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions to
give effect to Section 2(g), including in the event that the Registration
Statement ceases to be effective, will be given by ShellCo to its transfer
agent, and that the Securities shall otherwise be freely transferable on the
books and records of ShellCo, subject to compliance with applicable securities
laws, as and to the extent provided in this Agreement and the other Transaction
Documents. If a Buyer effects a sale, assignment or transfer of the Securities
in accordance with Section 2(g), the Company shall use best efforts to cause
ShellCo to permit the transfer and shall promptly instruct its transfer agent to
issue one or more certificates or credit shares to the applicable balance
accounts at DTC in such name and in such denominations as specified by such
Buyer to effect such sale, transfer or assignment. In the event that such sale,
assignment or transfer involves Common Shares or Warrant Shares sold, assigned
or transferred pursuant to an effective registration statement or pursuant to
Rule 144, and Buyer provides evidence of compliance with Rule 144 reasonably
acceptable to Company and ShellCo, the transfer agent shall, subject to
compliance with applicable securities laws, issue such Securities to the Buyer,
assignee or transferee, as the case may be, without any restrictive legend. The
Company acknowledges on behalf of itself and ShellCo that a breach by it of its
obligations hereunder will cause irreparable harm to affected Buyers.
Accordingly, the Company acknowledges on behalf of itself and ShellCo that the
remedy at law for a breach of its obligations under this Section 5(b) will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company or ShellCo of the provisions of this Section 5(b), that any affected
Buyers shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligations of the Company hereunder are subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company's and ShellCo's
benefit and may be waived by the Company or ShellCo at any time in their sole
discretion by providing each Buyer with prior written notice thereof:
(a) Such Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.
(b) Such Buyer and each other Buyer shall have delivered to the
Company the Purchase Price for the Common Shares and the related Warrants being
purchased by such Buyer and each other Buyer) at the Closing by wire transfer of
immediately available funds pursuant to the wire instructions provided by
ShellCo.
(c) The representations and warranties of such Buyer shall be true
and correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, each of which shall be true and
correct as of such date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date provided
22
that the materiality qualifier set forth in this sentence shall not be
applicable to (i) the conditions set forth in this Section 6 (which shall be
satisfied in all respects satisfactory to Company) or (ii) any covenants,
agreements or conditions that are already subject to a materiality qualifier.
(d) ShellCo shall have executed and delivered the Joinder Agreement.
(e) The Reorganization shall have been consummated.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
The obligation of each Buyer hereunder to purchase the Common Shares
and the related Warrants at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for each Buyer's sole benefit and may be waived by such
Buyer at any time in its sole discretion by providing the Company with prior
written notice thereof:
(a) Each of the Company, ShellCo and each of their Subsidiaries, to
the extent each is a party thereto, shall have executed and delivered to such
Buyer each of the Transaction Documents.
(b) ShellCo shall have executed and delivered to such Buyer the
Common Shares (in such denominations as such Buyer shall request) and the
related Warrants (in such denominations as such Buyer shall request) being
purchased by such Buyer at the Closing pursuant to this Agreement.
(c) Such Buyer shall have received the opinion of Xxxxx Xxxxxxx
Xxxxxxx Israels LLP, the Company's and ShellCo's outside counsel, Xxxxxxxxxx,
Hyatt & Xxxxxx, FMI International Inc.'s outside counsel and the Law Offices of
Xxxxxxx X. Xx & Associates, the Tug Companies' outside counsel, each dated as of
the Closing Date, in substantially the form of EXHIBIT E attached hereto.
(d) ShellCo shall have delivered to such Buyer a copy of the
Transfer Agent Instructions, in the form of EXHIBIT D attached hereto, which
instructions shall have been delivered to and acknowledged in writing by
ShellCo's transfer agent.
(e) The Company and ShellCo shall have delivered to such Buyer a
certificate evidencing the incorporation, partnership or formation, as
applicable, and good standing of the Company, each Target and ShellCo and each
of their Subsidiaries in such entity's jurisdiction of formation issued by the
Secretary of State (or comparable office) of such jurisdiction, as of a date
within 10 days of the Closing Date.
(f) The Company and ShellCo shall have delivered to such Buyer a
certificate evidencing the Company's, each Target's and ShellCo's qualification
as a foreign entity and good standing issued by the Secretary of State of the
State of its organization (or comparable office) and of each jurisdiction in
which ShellCo, the Company or such Target is required to qualify as a foreign
entity, each as of a date within 30 days of the Closing Date.
23
(g) Each of ShellCo, the Company and each Target shall have
delivered to such Buyer a certified copy of the certificate of incorporation as
certified by the Secretary of State of the State of its organization within 10
days of the Closing Date.
(h) Each of the Company and ShellCo shall have delivered to such
Buyer a certificate, executed by the Secretary of such entity and dated as of
the Closing Date, as to (i) the resolutions consistent with Section 3(b) as
adopted by the Company's Board of Directors in a form reasonably acceptable to
such Buyer, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as
in effect at the Closing, in the form attached hereto as EXHIBIT F.
(i) The representations and warranties of the Company and ShellCo
shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties which speak as of a specific date, each of which
shall be true and correct as of such date) and the Company or ShellCo, as
applicable shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such entity at or prior
to the Closing Date. Such Buyer shall have received a certificate delivered and
executed by the President of each of the Company and ShellCo, dated as of the
Closing Date, to the foregoing effect and as to such other matters as may be
reasonably requested by such Buyer in the form attached hereto as EXHIBIT G.
(j) ShellCo shall have delivered to such Buyer a letter from
ShellCo's transfer agent certifying the number of shares of Common Stock
outstanding as of a date within five days of the Closing Date before giving
effect to the transactions contemplated hereby.
(k) The Company and ShellCo shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the Common Shares and the Warrants.
(l) The Common Stock (i) shall be designated for quotation or listed
on an Eligible Market and (ii) shall not have been suspended, as of the Closing
Date, by the SEC or such Eligible Market from trading on such Eligible Market
nor shall suspension by the SEC or such Eligible Market have been threatened, as
of the Closing Date, either (A) in writing by the SEC or such Eligible Market or
(B) by falling below any minimum maintenance requirements of such Eligible
Market.
(m) The Company or ShellCo shall have filed a Certificate of Merger
with the Delaware Secretary of State whereby Merger Sub will be merged with and
into the Company, pursuant to which the holders of equity securities of the
Company will receive, in the aggregate, 12,854,893 shares of Common Stock (prior
to giving effect to the Reverse Split) (the "SHARE EXCHANGE"), and, the
shareholders of the Company, immediately prior to the Merger, will own, on a
fully-diluted basis following completion of the Merger, not less than 51% of
ShellCo's common equity.
24
(n) The Company shall have delivered to each Buyer a copy of the
consolidated audited financial statements of the Company and a copy of the
consolidated audited financial statements of the Targets prepared in accordance
with GAAP for the periods ended December 31, 2004 and December 31, 2005
(provided that in the case of Tug, no balance sheet shall be provided as of
December 31, 2004), which financial statements shall contain an opinion of such
auditor prepared in accordance with generally accepted auditing standards (which
opinion shall be without (x) a "going concern" qualification or exception or (y)
any qualification or exception as to the scope of such audit. ShellCo shall have
delivered to each Buyer a copy of the consolidated pro forma financial
statements of ShellCo for the periods ended the periods ended December 31, 2004
and December 31, 2005, which financial statements shall contain an opinion of
such auditor prepared in accordance with generally accepted auditing standards
(which opinion shall be without any qualification or exception as to the scope
of such audit).
(o) Each executive officer and officer of ShellCo who assumes the
duties of any such executive officer after the date hereof shall have entered
into employment agreements with the Company and ShellCo in the form of EXHIBIT
H. and the Lock-up Agreement in the form of EXHIBIT C.
(p) There shall not have developed, occurred, or come into effect or
existence after June 30, 2006 any change, or any development involving a
prospective change, in or affecting the position of the Company or ShellCo,
financial or otherwise, that has had, or would be expected to have, a Material
Adverse Effect.
(q) ShellCo shall have executed and delivered a joinder agreement to
this Agreement, in the form of EXHIBIT I hereto, dated as of the Closing Date
(the "JOINDER AGREEMENT"), to the effect that upon the Closing (i) each of the
representations and warranties made by the Company set forth in Section 3
hereof, MUTATIS MUTANDIS, shall be true and correct as if each reference to the
Company in such representations and warranties was a reference to ShellCo, (ii)
ShellCo assumes all covenants and obligations of ShellCo set forth herein and
(iii) ShellCo assumes all covenants and obligations of the Company set forth
herein (including, without limitation, all indemnification obligations) as if
each obligation of the Company and each reference thereto contained elsewhere
herein was an obligation of and a reference to ShellCo.
(r) Any and all equity securities and derivative securities
convertible or exercisable into equity securities of ShellCo or the Company and
outstanding prior to the Closing shall have been, concurrently with the Closing,
cancelled or terminated. See SCHEDULE 3(O).
(s) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such
Buyer or its counsel may reasonably request.
8. TERMINATION. In the event that the Closing shall not have occurred
in respect of a Buyer on or before ten (10) Business Days from the date accepted
by the Company, due to the Company's or such Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the nonbreaching party's
failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement in respect of such
25
breaching party at the close of business on such date without liability of any
party to any other party.
9. MISCELLANEOUS.
(a) GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. The Company hereby appoints
Corporation Service Company as its agent for service of Process in New York.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes all
other prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf in respect of the matters
discussed herein, and this Agreement, the Transaction Documents and the
instruments referenced herein contain the entire understanding of the parties
26
in respect of the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking in respect of such matters. No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the holders of Common Shares representing at
least a majority of the amount of the Common Shares, or, if prior to the Closing
Date, the Buyers listed on the Schedule of Buyers as being obligated to purchase
at least a majority of the amount of the Common Shares. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least 66-2/3% of the Shares issued hereunder, and
any amendment to this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as
applicable. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Common Shares, or holders of the Warrants, as the case may
be. The Company has not, directly or indirectly, made any agreements with any
Buyers relating to the terms or conditions of the transactions contemplated by
the Transaction Documents except as set forth in the Transaction Documents.
(f) NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally provided same is on a Business Day and, if not, on the next
Business Day; (ii) upon receipt, when sent by facsimile (provided confirmation
of transmission is mechanically or electronically generated and kept on file by
the sending party) provided same is on a Business Day and, if not, on the next
Business Day; (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the same; or
(iv) if sent by certified mail, return receipt requested, when received or three
(3) days after deposited in the mails, whichever occurs first. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Maritime Logistics US Holdings Inc.
000 Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
With a copy to:
Xxxxx Xxxxxxx Berlack Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx XxXxxxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
27
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,
with a copy (for informational purposes only) to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns, including any purchasers of the Common Shares or the
Warrants. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the holders of at
least 66-2/3% of the aggregate number of Shares issued hereunder, including by
way of a Fundamental Transaction (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the
Warrants). Subject to compliance with applicable securities laws, a Buyer may
assign some or all of its rights hereunder and under the other Transaction
Documents without the consent of the Company, in which event such assignee shall
be deemed to be a Buyer hereunder and thereunder in respect of such assigned
rights provided that Buyer provide Company and ShellCo with written notice of
such assignment within ten (10) Business Days after such assignment is
consummated.
(h) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person except to the extent set forth in Section 9(k).
(i) SURVIVAL. Unless this Agreement is terminated under Section 8,
the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5, 8
and 9 shall survive the Closing and the
28
delivery and exercise of Securities, as applicable. Each Buyer shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.
(j) FURTHER ASSURANCES. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) INDEMNIFICATION. In consideration of each Buyer's execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's other obligations under the Transaction
Documents, unless this Agreement is terminated under Section 8 hereof, the
Company, on behalf of itself and ShellCo, shall defend, protect, indemnify and
hold harmless each Buyer and each other holder of the Securities and all of
their stockholders, partners, members, officers, directors, employees and direct
or indirect investors and any of the foregoing Persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company or ShellCo in any Transaction Document or any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company or ShellCo contained in any
Transaction Document or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company or ShellCo) and arising out
of or resulting from (i) the execution, delivery, performance or enforcement of
any Transaction Document or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, or (iii) the status of such Buyer or holder of the Securities
as an investor in the Company or ShellCo pursuant to the transactions
contemplated by the Transaction Documents. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law provided
that the Company shall not be obligated to indemnify such Buyer or Collateral
Agent for any Indemnified Liabilities caused by the gross negligence or willful
misconduct of any Buyer or Collateral Agent. Except as otherwise set forth
herein, the mechanics and procedures in respect of the rights and obligations
under this Section 9(k) shall be the same as those set forth in Section 6 of the
Registration Rights Agreement.
(l) NO STRICT CONSTRUCTION. The language used in the Transaction
Documents will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
29
(m) REMEDIES. Each Buyer and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which such holders have under
any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes on behalf of itself and ShellCo that in the event that it
fails to perform, observe, or discharge any or all of its obligations under the
Transaction Documents, any remedy at law may prove to be inadequate relief to
the Buyers. The Company therefore agrees that the Buyers shall be entitled to
seek temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages and without posting a bond or other
security.
(n) RESCISSION AND WITHDRAWAL RIGHT. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then such Buyer may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.
(o) PAYMENT SET ASIDE. To the extent that the Company or ShellCo
makes a payment or payments to the Buyers hereunder or pursuant to any of the
other Transaction Documents or the Buyers enforce or exercise their rights
hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, foreign, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
(p) INDEPENDENT NATURE OF BUYERS' OBLIGATIONS AND RIGHTS. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group in respect of such obligations or the
transactions contemplated by the Transaction Documents and the Company
acknowledges on behalf of itself and ShellCo that the Buyers are not acting in
concert or as a group in respect of such obligations or the transactions
contemplated by the Transaction Documents. Each Buyer confirms that it has
independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction
30
Documents, and it shall not be necessary for any other Buyer to be joined as an
additional party in any proceeding for such purpose.
[SIGNATURE PAGE FOLLOWS]
31
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
MARITIME LOGISTICS US HOLDINGS INC. ADDRESS FOR NOTICE:
By:__________________________________________
Name:
Title:
With a copy to (which shall not constitute notice):
Xxxxx Xxxxxxx Xxxxxxx Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx XxXxxxxxx, Esq.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR BUYERS FOLLOW]
[Signature Page to Securities Purchase Agreement]
[BUYER SIGNATURE PAGES TO MARITIME LOGISTICS US HOLDINGS, INC.
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
IF THE PURCHASER IS AN INDIVIDUAL, AND IF PURCHASED AS JOINT TENANTS, AS TENANTS
IN COMMON, OR AS COMMUNITY PROPERTY:
____________________________ ______________________________
Print Name(s) Social Security Number(s)
___________________________ ______________________________
Signature(s) of Purchaser(s) Signature
IF THE PURCHASER IS A PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY OR
TRUST:
Name of Purchaser: _____________________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF PURCHASER: ________________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
FOR ALL PURCHASERS:
Email Address of Purchaser: ____________________________________________________
Fax Number of Purchaser: _______________________________________________________
Address for Notice of Purchaser:
Address for Delivery of Securities for Purchaser (if not same as above):
Subscription Amount ($):______________________________
Number of Units (each consisting of 100 shares of Common Stock and
Warrants to purchase 75 shares of Common Stock) being purchased:
___________________________
ANNEX A
CLOSING STATEMENT
Pursuant to the attached Securities Purchase Agreement, dated as of the date
hereto, the Purchasers shall purchase up to $50,000,000 of Common Stock and
Warrants from ShellCo (the "COMPANY"). All funds will be wired pursuant to
instructions from [ShellCo]. All funds will be disbursed in accordance with this
Closing Statement.
DISBURSEMENT DATE: __________ ___, 2006
--------------------------------------------------------------------------------
I. PURCHASE PRICE
GROSS PROCEEDS TO BE RECEIVED $
II. DISBURSEMENTS
$
$
$
$
$
TOTAL AMOUNT DISBURSED: $
WIRE INSTRUCTIONS:
Payee:
Citibank N.A. ABA #000000000
[330 Xxxxxxx Xxxxxx; Xxx Xxxx, Xxx Xxxx 00000],
for further credit to Law Debenture a/c #27633756;
reference: x/x # 00000 (xxxxxxx: X. Xxxxxxx 000-000-0000)
MARITIME LOGISTICS US HOLDINGS INC.
ACCREDITED INVESTOR CERTIFICATION
FOR INDIVIDUAL INVESTORS ONLY
(ALL INDIVIDUAL INVESTORS MUST INITIAL WHERE APPROPRIATE):
INITIAL _______ I certify that I have a net worth (including home, furnishings
and automobiles) in excess of $1 million either individually
or through aggregating my individual holdings and those in
which I have a joint, community property or other similar
shared ownership interest with my spouse.
INITIAL _______ I certify that I have had an annual gross income for the past
two years of at least $200,000 (or $300,000 jointly with my
spouse) and expect my income (or joint income, as appropriate)
to reach the same level in the current year.
INITIAL _______ I certify that I am a director or executive officer of
[ShellCo] (the "COMPANY").
FOR NON-INDIVIDUAL INVESTORS
(ALL NON-INDIVIDUAL INVESTORS MUST INITIAL WHERE APPROPRIATE):
INITIAL _______ The undersigned certifies that it is a partnership,
corporation, limited liability company or business trust that
is 100% owned by persons who meet either of the criteria for
Individual Investors, above.
INITIAL _______ The undersigned certifies that it is a partnership,
corporation, limited liability company or business trust that
has total assets of at least $5 million and was not formed for
the purpose of investing in the Company.
INITIAL _______ The undersigned certifies that it is an employee benefit plan
whose investment decision is made by a plan fiduciary (as
defined in ERISA ss.3(21)) that is a bank, savings and loan
association, insurance company or registered investment
adviser.
INITIAL _______ The undersigned certifies that it is an employee benefit plan
whose total assets exceed $5,000,000 as of the date of the
Subscription Agreement.
INITIAL _______ The undersigned certifies that it is a self-directed employee
benefit plan whose investment decisions are made solely by
persons who meet either of the criteria for Individual
Investors, above.
INITIAL _______ The undersigned certifies that it is a U.S. bank, U.S. savings
and loan association or other similar U.S. institution acting
in its individual or fiduciary capacity.
INITIAL _______ The undersigned certifies that it is a broker-dealer
registered pursuant to ss.15 of the Securities Exchange Act of
1934.
INITIAL _______ The undersigned certifies that it is an organization described
in ss.501(c)(3) of the Internal Revenue Code with total assets
exceeding $5,000,000 and not formed for the specific purpose
of investing in the Company.
INITIAL _______ The undersigned certifies that it is a trust with total assets
of at least $5,000,000, not formed for the specific purpose of
investing in the Company, and whose purchase is directed by a
person with such knowledge and experience in financial and
business matters that he is capable of evaluating the merits
and risks of the prospective investment.
INITIAL _______ The undersigned certifies that it is a plan established and
maintained by a state or its political subdivisions, or any
agency or instrumentality thereof, for the benefit of its
employees, and which has total assets in excess of $5,000,000.
INITIAL _______ The undersigned certifies that it is an insurance company as
defined in ss.2(13) of the Securities Act of 1933, as amended,
or a registered investment company.
MEMORANDUM
WIRE TRANSFER AUTHORIZATION
TO: Operations Manager
_________________________
RE: Client Wire Transfer Authorization
Maritime Logistics US Holdings Inc.
DATE: _____________, 2006
--------------------------------------------------------------------------------
This memorandum authorizes the transfer of the following listed funds from my
________________ Account as follows:
________________ Account # ______________________
Wire Amount $______________________
[BANK]
ACCT. NAME:
ABA NUMBER: __________________
A/C NUMBER: __________________
REFERENCE:
SUBSCRIBER LEGAL NAME
______________________________________________________
TAX ID NUMBER
______________________________________________________
SUBSCRIBER ADDRESS
______________________________________________________
FBO: _________________________________________________
Investment Title: ____________________________________
Signature: ___________________________________________
Signature: ___________________________________________
(Joint Signature)
SCHEDULE OF BUYERS
(1) (2) (3) (4) (5) (6)
NUMBER OF
COMMON SHARES NUMBER OF WARRANT
PRIOR TO REVERSE SHARES PRIOR TO LEGAL REPRESENTATIVE'S
BUYER ADDRESS AND FACSIMILE NUMBER SPLIT REVERSE SPLIT PURCHASE PRICE ADDRESS AND FACSIMILE NUMBER
-----------------------------------------------------------------------------------------------------------------------------------
EXHIBITS
Exhibit A Form of Warrants
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Lockup Agreement
Exhibit D Form of Transfer Agent Instructions
Exhibit E Forms of Legal Opinions
Exhibit F Form of Secretary's Certificate
Exhibit G Form of Officer's Certificate
Exhibit H Form of Employment Agreement
Exhibit I Form of Joinder Agreement
SCHEDULES
Schedule 3(a) List of Subsidiaries
Schedule 3(l) Conduct of Business; Regulatory Permits
Schedule 3(n) Transactions with Affiliates
Schedule 3(o) Equity Capitalization; Debt
Schedule 3(p) Indebtedness and Other Contracts
Schedule 3(r) Insurance
Schedule 3(t) Title
Schedule 3(x) Tax Status
